AdvanSix has reported a sharp drop in second-quarter profit despite higher sales, as weaker fertilizer demand and lower production weighed heavily on earnings.
AdvanSix’s second-quarter net income plunged 90% year over year to $3.25 million, while adjusted EBITDA fell 43% to $31.9 million, as challenging agricultural conditions drove a steep decline in Plant Nutrients sales.
The Parsippany, New Jersey-based chemistry company reported sales of $421.3 million for the quarter ended June 30, up 3% from $410 million a year earlier. But the higher revenue was driven largely by pricing, which offset a 15% decline in sales volume.
Diluted earnings per share dropped to $0.12 from $1.15 a year earlier. Adjusted diluted EPS fell to $0.19 from $1.24.
“Our resilient second quarter results reflected a significant sequential improvement in earnings and cash flow amid what remains a highly dynamic macro environment, particularly in Plant Nutrients,” said Erin Kane, president and CEO of AdvanSix.
“We generated 3% sales growth year-over-year as our commercial teams continued to leverage both formula and market-based pricing mechanisms to offset inflationary raw material costs. Sales volume in the quarter fell short of expectations due to a decline in ammonium sulfate as the spring planting season was challenged by farmer profitability and resulting fertilizer consumption overall.
"Nylon Solutions and Chemical Intermediates both performed at or better than expectations as we continue to navigate a subdued industrial end market demand environment. We have a demonstrated track record of successfully performing through a multitude of environments and remain confident in our ability to deliver long-term value.”
Plant Nutrients was the biggest drag on the quarter. Sales in the segment fell 16% to $131.4 million, down from $156.8 million a year earlier.
AdvanSix said farmer economics and weaker fertilizer consumption during the spring planting season reduced in-season purchases, particularly ammonium sulfate.
The volume decline was partially offset by stronger pricing. Overall pricing rose 18%, including a 13% increase from raw-material pass-through pricing and a 5% improvement in market-based pricing.
Chemical Intermediates provided a counterweight, with sales rising 18% to $127 million. Nylon sales also jumped 26% to $100.2 million, while caprolactam sales declined 6% to $62.6 million.
The company’s adjusted EBITDA margin fell to 7.6% from 13.6% a year earlier.
AdvanSix attributed the earnings decline primarily to lower Plant Nutrients volumes and reduced production output, partly offset by planned reductions in selling, general and administrative expenses.
Cash generation also weakened. Operating cash flow fell 52% to $10 million from $21.1 million, while free cash flow deteriorated to negative $10.7 million from negative $7.2 million.
Capital spending, however, declined 27% to $20.7 million.
For the first six months of 2026, AdvanSix reported a net loss of $12.3 million, compared with net income of $54.7 million in the same period last year. Operating cash flow was negative $5.3 million, versus positive $32.6 million a year earlier.
AdvanSix expects competitive pressure to weigh on domestic ammonium sulfate pricing in the third quarter, while sulfur input costs remain elevated.
The company also expects acetone spreads over propylene costs to remain near cycle averages for the full year and plans to continue optimizing Nylon Solutions production, inventories and sales mix amid prolonged weakness in industrial markets.
AdvanSix lowered its expected 2026 capital spending range to $75 million-$95 million, compared with $116 million in 2025, as it prioritizes base investments and enterprise programs while continuing growth initiatives such as SUSTAIN.
The company now expects plant turnarounds to have an approximately $17 million pretax impact on 2026 earnings, down from roughly $25 million in 2025.
AdvanSix also expects cash flow to improve sequentially during the second half of the year, helped by lower capital spending, working-capital benefits, the timing of annual payments and cash-tax optimization.
“Key to our strategy is a keen focus on controllable levers to support through-cycle profitability and cash conversion, while progressing targeted growth strategies and initiatives. We remain focused on delivering on our non-manpower fixed cost savings program, risk-based prioritization of our capital investments, continued working capital discipline and 45Q carbon capture tax credits to support improved cash flow generation.
"As we move through the remainder of 2026 and navigate the current industry environment, we are well positioned to support our strategic priorities as a U.S.-based integrated manufacturer aligned to domestic supply chains and energy markets as well as a diverse set of end market applications,” concluded Kane.
